Security Bank of Marshalltown v. Newman (1 F.3d 687, 1993)

McMILLIAN, Circuit Judge.

This is an appeal from a final order entered in the United States District Court for the Southern District of Iowa affirming an order entered in the United States Bankruptcy Court for the Southern District of Iowa overruling appellant’s objection to the trustee’s distribution of funds. Security Bank of Marshalltown, Iowa (appellant), objected to the trustee’s decision to treat certain post-petition debts as Chapter 13 administrative fees and expenses, thereby giving those debts a higher priority than the debt owed to appellant. For reversal, appellant argues the post-petition debts are not entitled to administrative claim status and that the bankruptcy court erred in refusing to subordinate the post-petition debts to that owed to appellant. We affirm the order of the district court.

I.

The underlying facts are not disputed. Robert V. and Susan A. Brown (debtors), were farmers engaged in raising and selling hogs. On December 27, 1982, they filed a Chapter 13 bankruptcy petition. At that time their debt owed to appellant was $323,-645.52; however, the collateral securing the debt, primarily their hog herd and various notes, was valued at only $151,745.60. Debtors’ Chapter 13 plan divided appellant’s claim into secured and unsecured portions and was confirmed in August 1983. The allowed secured portion of appellant’s claim, $168,-840.01, was originally to be paid over 5 years, but the period was later shortened to 3 years. The remaining unsecured portion of appellant’s claim, $154,805.51, was to be paid off at the same rate as other unsecured creditors — 44.5